More on the MOCA Meltdown

Before we get to the Diller, Scofidio + Renfro renovations at Alice Tully Hall in New York, there was an interesting passage yesterday in a Los Angeles Times story by Mike Boehm and Kim Christensen about how the LA Museum of Contemporary Art burned through so much of its endowment that its very existence is now in question.

It appears that to finance some of its expensive (and frequently first rate) exhibitions, MOCA repeatedly dipped into “restricted funds” — money provided by donors for specific purposes like acquisitions. This may be one of the MOCA practices being looked into by the California state attorney general’s office, which has asked the museum for financial records.

The key passage:

[MOCA board co-chairman Tom] Unterman hedged when asked if MOCA has proof that it got approval from all donors whose restricted contributions were used for other purposes. “There have been exercises to make sure that to the extent that there were contractual stipulations, that they have been honored,” he said.

Even if the withdrawals from the restricted fund accounts weren’t illegal — and that would depend on how specific the donor’s wishes were — they were a bad idea. Once it becomes public knowledge that a museum indulges in that practice, it can have the effect of discouraging future donors, who can’t be sure of having their stipulations honored. This is why deaccessioning — selling off art — can also be counter productive as a way to raise money. It makes future donors think twice about where they want their art to go.

Speaking of which, another line from the Times story:

There also has been some discussion of selling artwork, but no action has been taken.

The MOCA trustees meet tomorrow to examine their options. Will they decide to respond to the $30 million lifeline being offered by the L.A. philanthropist Eli Broad? Stay tuned.